Tether to Launch UAE Dirham-Pegged Stablecoin

Tether has announced its plans to launch a new stablecoin pegged to the United Arab Emirates Dirham (AED).

The development of this stablecoin will involve a partnership with Phoenix Group PLC, a technology company based in the UAE, and will also be supported by Green Acorn Investments Ltd.

The Dirham-pegged token will expand Tether’s current range of stablecoins, which includes USDt, EURT, CNHT, MXNT, XAUT, and aUSDT. 

Tether intends to seek licensing for this stablecoin under the UAE Central Bank’s newly introduced Payment Token Services Regulation.

This stablecoin will represent the value of the UAE Dirham and will be backed by liquid reserves held within the UAE. 

Tether has indicated that the token will adhere to its existing reserve and transparency practices to maintain stability by directly linking the token’s value to the AED.

The Dirham-pegged stablecoin is intended to facilitate international trade and remittances by offering a cost-effective method of transacting in AED. 

It is also expected to help reduce transaction fees and potentially provide protection against currency fluctuations.

Tether's CEO, Paolo Ardoino, commented on the significance of this move, highlighting the economic growth of the UAE. 

The company views this stablecoin as a potential tool for businesses and individuals involved in cross-border payments, trading, or digital asset diversification.

The global market for stablecoins is currently valued at approximately $150 billion, with Tether’s USDt comprising more than $115 billion of this market. Projections indicate that the industry could grow to $2.8 trillion by 2028. 

In the UAE, Bitcoin and cryptocurrency adoption has been increasing, driven by the establishment of the Virtual Asset Regulatory Authority, a regulatory body focused on Bitcoin and crypto assets. 

This framework has positioned cities like Dubai and Abu Dhabi as significant players in the global digital asset sectors.

Seyedmohammad Alizadehfard, Co-Founder and Group CEO of Phoenix Group, expressed a positive outlook on the collaboration with Tether, noting the potential benefits for the digital economy in the region. 

He also pointed to Abu Dhabi’s regulatory environment as a conducive setting for the launch of this stablecoin.